(Bloomberg) — Vodafone Group Plc and Iliad SA are discussing a deal that would merge their businesses in Italy, Reuters reported, citing people familiar with the situation that it didn’t identify.
The combination would create a business with revenue of almost 6 billion euros ($6.8 billion).
Iliad, which is set to start fixed-line broadband operations in Italy next week, is working with Lazard Ltd., according to the report. It’s uncertain if the talks will lead to a transaction. A representative for Vodafone declined to comment. Iliad declined to comment to Reuters.
The deliberations come as Telecom Italia SpA weighs a 10.8 billion-euro takeover bid from KKR & Co. Vodafone recently explored a potential purchase of Three UK from CK Hutchison Holdings Ltd., Bloomberg News reported earlier on Saturday.
European telecom carriers’ efforts to create value through mergers and acquisitions could herald a busy 2022, with a consolidation push likely taking center stage. Vodafone has been eyeing deals in its major markets while other carriers entertain the prospect of tower mergers.
Deals May Spark Appetite for Beaten-Down Telecoms: Taking Stock
Telecom Italia named General Manager Pietro Labriola as its new chief executive officer on Friday, throwing up a fresh hurdle for KKR’s bid. The carrier’s board voted unanimously to pick Labriola with the backing of its two largest investors — French media conglomerate Vivendi SE and Italian state lender Cassa Depositi e Prestiti SpA.
The backing of the state lender for Labriola and his new business plan could make it harder for KKR to succeed with its bid, which is still pending, according to people familiar with the matter.
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